Canada arrests Chinese telecom chief

Canada has arrested Huawei’s global chief financial officer in Vancouver, where she is facing extradition to the US in a move likely to exacerbate tensions between the US and China.

Meng Wanzhou, one of the vice-chairs on the Chinese technology company’s board and the daughter of the company founder Ren Zhengfei, was arrested on December 1 and a court hearing has been set for Friday, according to Canada’s department of justice. The arrest related to violations of US sanctions.

In a statement, the department confirmed Meng had been arrested and was facing extradition. 'As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms Meng,' it said.

US stock futures and Asian shares tumbled after the arrest. The news came as Washington and Beijing begin three months of negotiations aimed at de-escalating their bruising trade war, which is adding to global investors’ worries over rising US interest rates and other risks to global economic growth.

'The US has been telling its allies not to use Huawei products for security reasons and is likely to continue to put pressure on its allies,' said Mr. Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

'So while there was a brief moment of optimism after the weekend US-China talks but the reality is, it won’t be that easy,' he said.

US authorities have been investigating Huawei since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws.

Huawei, one of the world’s largest makers of telecommunications network equipment, said in a statement that Meng had been 'temporarily detained' and faced unspecified allegations in the Eastern district of New York.

The company said it had complied with 'all applicable laws and regulations where it operates,' including sanction laws.

'There has been very little information provided to Huawei on the specific allegations. Huawei is not aware of any misconduct by Ms. Meng,' Guo Ping, rotating CEO of the company said in a statement.

'The company believes the Canadian and US legal systems will ultimately reach a just conclusion.'

The arrest comes days after president Donald Trump and president Xi Jinping held a meeting in Argentina where they agreed to steps to resolve the ongoing trade war between the world’s two largest economies. US stock futures tumbled, followed by Asian markets, after news of the arrest broke.